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The Pulse of the Pharmaceutical Industry

2016 Annual Report: Top 50 Companies – Pipelines & Pricing

Written by: | | Dated: Monday, October 17th, 2016


The amount of new drug approvals in 2015 was the FDA’s highest total since 1950 due in part to revamped pipelines, but a tough future looms as the grumblings over pricing have risen to a roar.


First, the good news: in 2015, the U.S. Food and Drug administration approved 51 new drugs, the most in one year since 1950. Now for the bad news: In the future, pharma will be fighting much harder to set and get payment for its R&D successes. With questions raised about specific companies’ pricing practices (Turing Pharmaceuticals and Daraprim; Gilead Sciences and Harvoni; and Mylan Pharmaceuticals and EpiPen), the industry will continue to battle for a better public image and a monetary return on investment.

According to FDA, the total of 2015’s new medicines includes 45 drugs approved by the Center for Drug Evaluation and Research and six recombinant therapies by the Center for Biologics Evaluation and Research.

The new chemical entities approved include Yondelis from Johnson & Johnson (see profile on page 48); Nucala from GlaxoSmithKline (see profile on page 44); Tagrisso from AstraZeneca (see profile on page 30); Empliciti from Bristol-Myers Squibb (see profile on page 36) and AbbVie (see profile on page 22); Portrazza from Eli Lilly (see profile on page 52); Genvoya from Gilead Sciences (see profile on page 40); and Tresiba from Novo Nordisk (see profile on page 62).

New biologics approved include Fluad and Bexsero from Novartis (see profile on page 59); Imlygic from Amgen (see profile on page 26); and Quadracel from Sanofi Pasteur, the vaccines subsidiary of Sanofi (see profile on page 70).

Johnson & Johnson received approval for Yondelis in October 2015 for the treatment of specific soft tissue sarcomas (STS) – liposarcoma (LPS) and leiomyosarcoma (LMS) – that cannot be removed by surgery (unresectable) or is advanced (metastatic). While approved for both LPS and LMS, Yondelis is the first treatment to be specifically approved for LPS in the United States.

“In the clinical trial, Yondelis significantly increased progression free survival compared to dacarbazine; this is an important endpoint for these patients, in whom rapid worsening of the disease can lead to worse symptoms and life-threatening situations,” says George D. Demetri, M.D., director of the Ludwig Center at Harvard and director of the Center for Sarcoma and Bone Oncology at the Dana-Farber Cancer Institute, and principal investigator of the Phase III registration trial.

GlaxoSmithKline announced the U.S. approval of Nucala in November 2015 for use with other asthma medicines for the maintenance treatment of asthma in patients age 12 years and older. Nucala is the first approved biologic therapy that targets interleukin-5 (IL-5), which plays an important role in regulating the function of eosinophils, an inflammatory cell known to be important in asthma. It is administered as a 100 mg fixed dose subcutaneous injection every four weeks. Patients will receive Nucala in addition to their normal medications for severe asthma, which include high-dose inhaled corticosteroids plus at least one additional asthma control medicine, and may include oral corticosteroids.

AstraZeneca received U.S. approval of Tagrisso in November 2015 for the treatment of patients with metastatic epidermal growth factor receptor (EGFR) T790M mutation-positive non-small cell lung cancer (NSCLC), as detected by an FDA-approved test, who have progressed on or after EGFR tyrosine kinase inhibitor (TKI) therapy. Tagrisso is an EGFR-TKI, a targeted cancer therapy designed to inhibit both the activating, sensitizing mutations (EGFRm), and T790M, a genetic mutation responsible for EGFR-TKI treatment resistance. Nearly two-thirds of NSCLC patients who are EGFR mutation-positive and experience disease progression after being treated with an EGFR-TKI develop the T790M resistance mutation, for which there have been limited treatment options.

AstraZeneca has collaborated with Roche (see profile on page 67) to develop the cobas EGFR Mutation Test v2 as the companion diagnostic for Tagrisso. The cobas EGFR Mutation Test v2 is intended to identify a range of EGFR mutations in patients with non-small cell lung cancer, including T790M.

Bristol-Myers Squibb gained approval for Empliciti in November 2015 for treating people with multiple myeloma fas combination therapy with Revlimid (lenalidomide) and dexamethasone in patients who have received one to three prior therapies. The product is the first and only immunostimulatory antibody for multiple myeloma.

“Empliciti represents a fundamentally different approach of directly activating the immune system in patients with relapsed or refractory multiple myeloma, delivering improved outcomes for those in need,” says Francis Cuss, MB Bchir, FRCP, chief scientific officer, Bristol-Myers Squibb.

Approval of Lilly’s Portrazza also came in November 2015. The drug is intended to treat patients with advanced (metastatic) squamous non-small cell lung cancer who have not previously received medication specifically for treating their advanced lung cancer. Portrazza has been granted Orphan Drug Designation by the FDA.

“We have seen advances in lung cancer in the last 20 years, but not for the initial treatment of patients battling metastatic squamous non-small cell lung cancer. This is a complex disease and there is an urgent need for effective, first-line treatments,” says Richard Gaynor, M.D., senior VP, product development and medical affairs for Lilly Oncology. “The approval of Portrazza is an important step forward that reaffirms Lilly’s commitment to discovering new treatments that respond to the needs of individual patients.”

Gilead’s Genvoya, for use as a complete regimen for the treatment of HIV-1 infection in adults and pediatric patients 12 years of age and older, was also approved in November 2015. Genvoya is the first TAF-based regimen to receive FDA approval. TAF is a novel targeted prodrug of tenofovir that has demonstrated high antiviral efficacy similar to and at a dose less than one-tenth that of Gilead’s Viread (tenofovir disoproxil fumarate, TDF), as well as improvement in surrogate laboratory markers of renal and bone safety as compared to TDF in clinical trials in combination with other antiretroviral agents. Data show that because TAF enters cells, including HIV-infected cells, more efficiently than TDF, it can be given at a lower dose and there is 91 percent less tenofovir in the bloodstream.

Novo Nordisk received approval of Tresiba in September 2015 to improve blood sugar control in adults with diabetes mellitus. The product, a once-daily, long-acting basal insulin, is indicated for use alone, or in combination with oral anti­diabetic medicines or bolus insulin, and is approved for glycemic control in adults with type 1 and type 2 diabetes. Tresiba provides a long duration of action beyond 42 hours. While patients are encouraged to take their insulin at the same time each day, Tresiba allows patients to dose at any time of the day.

“Since 1923, Novo Nordisk has been committed to advancing insulin therapy for patients with diabetes, and we are proud to bring forward the first new basal insulin molecule to be approved by the FDA in 10 years,” says Jesper Høiland, president of Novo Nordisk in the United States and executive VP of Novo Nordisk]. The product was launched in the first quarter of 2016 in the United States.

Novartis received approval of Bexsero in January 2015. The vaccine is for active immunization to prevent invasive disease caused by Neisseria meningitidis serogroup B. Bexsero is approved for use in individuals 10 through 25 years of age.

Bexsero is the only meningitis B vaccine approved in the United States with a two-dose regimen and a flexible dosing schedule. As part of the accelerated approval process, Novartis will complete its ongoing studies to confirm the effectiveness of Bexsero against diverse serogroup B strains.

“While rare, meningitis B is a devastating disease that can hit anyone anytime, especially teenagers and children,” says Andrin Oswald, division head, Novartis Vaccines. “This approval is an important milestone towards our goal of helping to prevent any further loss of life.”

The approval of Novartis’ Fluad came in November 2015. The product is for active immunization of persons 65 years of age and older against influenza disease caused by influenza virus subtypes A and B contained in the vaccine.

Fluad is the first seasonal influenza vaccine containing an adjuvant. The vaccine, which is manufactured using an egg-based process, is formulated with the adjuvant MF59, an oil-in-water emulsion of squalene oil. Squalene, a naturally occurring substance found in humans, animals and plants, is highly purified for the vaccine manufacturing process. Adjuvants are incorporated into some vaccine formulations to enhance or direct the immune response of the vaccinated individual.

Amgen received approval of Imlygic in October 2015 for the local treatment of unresectable cutaneous, subcutaneous, and nodal lesions in patients with melanoma recurrent after initial surgery.

Imlygic is the first oncolytic viral therapy approved in the United States. The product is a genetically modified herpes simplex virus type 1 designed to replicate within tumors and produce an immunostimulatory protein called granulocyte-macrophage colony-stimulating factor (GM-CSF). Imlygic causes cell lysis, or death, which ruptures tumors, releasing tumor-derived antigens, which along with GM-CSF, may promote an anti-tumor immune response.

“Imlygic is the first clinical and regulatory validation of an oncolytic virus as a therapy, which Amgen is proud to bring to patients with a serious form of skin cancer. Not all melanoma patients currently benefit from available therapies, and Imlygic represents an important new option that can provide meaningful durable responses for patients with this aggressive and complex disease,” says Sean E. Harper, M.D., executive VP of research and development at Amgen. “Immunotherapy is an exciting area for cancer research, and we are currently studying Imlygic in combination with other immunotherapies in advanced melanoma and other solid tumors.”

Sanofi Pasteur’s Quadracel was approved in the United States in March 2015 for active immunization against diphtheria, tetanus, pertussis, and poliomyelitis in children 4 through 6 years of age.

“The FDA approval of Quadracel vaccine provides health care providers with a new combination vaccine, potentially reducing the number of vaccine injections children aged 4 through 6 would need,” says David P. Greenberg, M.D., VP, U.S. Scientific and Medical Affairs, Sanofi Pasteur. “Our goal is to help remove barriers to timely immunization and we think this combination vaccine could help ensure children are getting vaccinated in line with current recommendations.”


The Problems With Pricing

2015 brought a “poster boy” to the issue of pharmaceutical pricing – Martin Shkreli, the investment banker and former CEO of Turing Pharmaceuticals. Shkreli and Turing came to widespead criticism in September 2015 when it became known that the company had raised the price of Daraprim, an antiparasitic drug, from $13.50 to $750 per tablet.

In response to the criticism about Daraprim, Shkreli in an appearance on Bloomberg Markets in September 2015, claimed that patients would be actually paying lower prices because of lower co-pays and that the company had expanded its free drugs program. He defended the price increase, and a few days after the interview he said he was going to lower the price by an unspecified amount in response to the criticism. But Turing reversed that decision late in November 2015, saying the company would negotiate volume discounts for hospitals of up to 50 percent.

Shkreli was arrested in December 2015 for securities fraud associated with his former company, the biotechnology firm Retrophin. While he was at Retrophin, in May 2014 the company acquired Thiola, which treats the rare disease cystinuria. The company raised the price of the drug from $1.50 to $30 a pill.

In February 2016, Shkreli appeared before the House Committee on Government and Oversight Reform, where he refused to answer any questions, invoking his Fifth Amendment rights.

Shkreli was the most public face of pharmaceutical pricing practices, but Daraprim was not the only drug where prices have come under fire. Gilead has been battling criticism about its hepatitis C drug Harvoni. The pricing of Harvoni has been condemned by members of Congress and is the subject of state investigations and lawsuits.

A course of Harvoni costs $94,500. Gilead’s earlier drug for hepatitis, Sovaldi, costs $84,000 for a full course of treatment and has also been subject to criticism over its pricing.

In January 2016, Massachusetts Attorney General Maura Healey threatened to sue Gilead over the pricing of its hepatitis C treatments. But whether the move will yield any results is not certain, according to Ed Silverman of the blog Pharmalot (“Massachusetts threat to sue Gilead over prices is an uncertain gambit,” Jan. 27, 2016).

Healey claims Gilead violated the state’s Consumer Protection Act, but legal experts say her argument may not succeed.

The most recent pharmaceutical pricing controversy is, like Daraprim, not over a new drug. In August 2016, Mylan Pharmaceuticals, the maker of the anaphylactic shock treatment EpiPen, came under fire for price increases related to the drug. Bloomberg in September (“How EpiPen’s price rose and rose,” Sept. 1, 2016) noted that the price of the product since Mylan acquired it in 2007 has risen from $50 a shot to $304. The product is sold in a two-pack, and without insurance patients could pay more than $600 for it. In August Mylan announced it would be producing a generic version prices at $300 for a two pack, but the criticism continues.

Mylan CEO Heather Bresch went before the House Oversight Committee in September, where she defended the price hikes and said the company sees only one-sixth of the retail price for EpiPen. The CEO says the wholesale acquisition cost of an EpiPen twin-pack is $608, but says Mylan only receives $274 of that after fees and rebates. After subtracting cost of goods and the costs associated with the autoinjector, Mylan receives $100, or $50 per shot.

Ranking member Rep. Elijah Cummings, D-Md., was among those who blasted Bresch, saying Mylan was using a “simple but corrupt business model: find an old, cheap drug that has virtually no competition, then raise the price over and over and over again.”

The Wall Street Journal reported in September that the House Oversight Committee has sent a letter to Mylan, demanding to know why the company omitted from its testimony key information it used to calculate the profit figure for EpiPen.

Writing at STAT News, James Baker Jr., CEO and chief medical officer of Food Allergy Research & Education (FARE), says the EpiPen pricing controversy has focused a lot of attention about pharmaceutical industry practices (“EpiPen pricing controversy reflects larger issues in pharma industry,” Sept. 28, 2016).

“The epinephrine auto-injector market in this country is a remarkable microcosm of almost every issue facing the pharmaceutical market in the United States: challenges of access and affordability, lack of meaningful competition, and pockets of limited innovation,” Dr, Baker says.

According to Baker, the controversy shows how insurance covers — or rather, does not cover — access to prescription medications. To satisfy high-deductible insurance plans, patients are often paying the full price for products such as EpiPen. Up to 40 percent of people in employer-sponsored plans may now be enrolled in such high-deductible plans, according to research from the Kaiser Family Foundation.

As the pharmaceutical industry continues to mark its successes in 2016, it will have to take into account the shadow of pricing reform legislation, particularly in light of the November presidential election. The industry is taking notice. Matt Giegerich, CEO of the healthcare advertising company Ogilvy CommonHealth, WorldWide, notes in a September blog post, “Yes, there have been similar threats in the past — usually surfacing around rogue players in an otherwise noble, well-intended industry — and yes, they have all eventually lost momentum as the news media, legislators and the public eventually turn their attention to other matters of the moment.

“Perhaps it’s because of the cumulative, water-on-stone effect of all of these cases, or maybe it’s the mounting populist mood of the nation, but this storm feels different, more substantial, more ominous and more inescapable.”

Giegerich notes that although there have been similar threats of price reform in the past, and attention has turned away to other issues, “it appears almost inevitable that in short order the government will land new legislation allowing drug price negotiation at the federal level.”

Comparing this new threat of pricing reform to a hurricane, Giegerich says, “Perhaps it’s because of the cumulative, water-on-stone effect of all of these cases, or maybe it’s the mounting populist mood of the nation, but this storm feels different, more substantial, more ominous and more inescapable.

“It appears all the storm ‘models’ agree. The threat of significant drug-pricing reform – and possibly broader industry reform – is not just on the radar, it’s now just offshore, spinning, intensifying and growing. Landfall is only a matter of time. Buckle in.” 

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